Following up on Tuesday’s post (Tax Gap at Record High 14.4%) on the new Bureau of Economic Analysis report (Comparison of BEA Estimates of Personal Income and IRS Estimates of Adjusted Gross Income):  Bloomberg has published an interesting article on the subject, Income Tax Gap at $1 Trillion, by Ryan J. Donmoyer.  Here is the opening:

Americans avoided paying taxes on a record $1 trillion in income in 2003, according to a new federal government report. The annual study by the Commerce Department’s Bureau of Economic Analysis shows the gap between true income and the amount Americans reported on income-tax filings has increased 35 percent between 2000 and 2003, a period when tax rates were falling. In the previous four decades, the gap has increased when taxes were raised and contracted when rates were lower. The data, based on different assumptions than information collected by the Internal Revenue Service, raise new questions about long-held beliefs that more Americans will comply with tax laws as their tax burden decreases, analysts said. It also increases pressure on Internal Revenue Service law enforcement efforts even as the agency says it is getting tougher with high-income people.